What does ‘skin in the game’ mean?
Skin in the game is jargon — popularised by Nassim Taleb’s 2018 book — for participants in a venture, investment or decision who bear personal financial or reputational consequence if it fails. The principle holds that people with skin in the game make better decisions because their outcomes are tied to the result.
In venture capital, founder skin in the game (personal capital committed, restricted-stock vesting, full-time commitment) is a signal to investors. Similarly, GP commitment to a fund (typically 1–3% of fund size) is the LP’s expectation that the manager has skin in the game.